A little optimism goes a long way

While watching a recent debate on television regarding the liquidity crisis, somebody asked the question: “Are we guilty of talking ourselves into a recession?” which made me think, are we?

Speaking to one packager this week, he informed me that he was recruiting eight new business development managers because he believed the market would soon be on its way back, and he wanted to be geared up to cope with demand. I’m sure there’s a lot of people out there that hope his predictions come true, while others may think it is foolish approach to take while the market is still unsteady.

Either way, it’s sending out the right message, in the same way that Gordon Brown did this week when he announced his bond plans, which he hopes will be the saviour for the British economy.

Only time will tell if it actually works, but what is perhaps more important will be the affect it has on consumer confidence. Thousands can be wiped from a firm’s shares in one day if it gets some negative PR or its share holders hear whispers of financial trouble, in the same way that shares can increase in value if it’s rumoured that the firm is about to see an increase in business volumes, it is all about perceptions.

While it is hard to stay positive with so much negativity around, it is important to remain upbeat and remain positive about the market.

The G7 group of industrialised nations met at the weekend to discuss ways of tackling the global credit crisis. The agenda included talks on the transparency of banks’ exposure to risk, rules concerning credit ratings and the role of central banks.

John Mack, chairman and chief executive of Morgan Stanley, predicts the crisis in US sub-prime and leveraged loans could be over in six months. He says the investment bank would consider buying portfolios of mortgage assets when potential returns become attractive.

In this short video, Azhar Hussain, head of global high yield at Royal London Asset Management, explains how his team balance bottom-up with top-down research in constructing multi-asset credit portfolios. Watch the video in full The value of investments and the income from them is not guaranteed and may go down as well as up […]